Week 2 Financial Terms Worksheet Essay
University of Phoenix Material Week Two Health Care Financial Terms Worksheet Understanding health care financial terms is a prerequisite for both academic and professional success.
This assignment is intended to ensure you understand some of the basic terms used in this course. Complete the worksheet below according to the following guidelines:In the space provided, write each term’s definition as used in health care management. You must define the term in your own words. In the space provided after each term’s definition, summarize a health care management scenario that illustrates the importance of the skill, concept, procedure, or tool to which the term refers.
In the scenario, you may wish to consider the following: Why the skill, concept, procedure, or tool is necessary for accurate record keeping, operational efficiency, excellent patient services, employee management, regulatory compliance, reducing costs, forecasting, and so forth o Successes enabled by an adequate understanding or appropriate application of the skill, concept, procedure, or tool o Risks or failures associated with an inadequate understanding or inappropriate application of the skill, concept, procedure, or tool Save the completed worksheet as a Microsoft® Word document with your name in the file name.Submit the file to your instructor. Worksheet Submitted By: |Term |Definition |Scenario | |Balance sheet |The balance sheet contains information about an |Healthcare providers with seasonal demand, such as a walk-in clinic| | |organization’s assets and the financing used to |in the Northeast during flu season will have a balance sheet for | | |acquire those assets.The balance sheet presents a |this time period that will look completely different compared to | | |snapshot of the financial position of an |one completed in mid-summer.
A business that is growing rapidly | | |organization at a given point in time. |will also have significant changes in their balance sheets over | | | |relatively short periods of time. |Statement of |The statement of revenue and expense is similar to |Using the example from above of a clinic with a change in seasonal | |revenue and |the balance sheet, except it covers a period of time|demands, the statement of revenue expense can be used to compare | |expense |rather than one specific date or point in time.
|the same time period from a year ago.This comparison can allow the| | | |clinic to see if there has been an increase or decrease in seasonal| | | |demand during this period, and assist them in determining the | | | |reasons for the change.If seasonal business has decreased, the | | | |reason could be due to an increase in patients opting for flu | | | |shots, or could indicate patients are receiving poor service and | | | |have opted to go to another clinic. |Revenue cycle |The revenue cycle is defined as the set of recurring|Revenue cycle activities would include pre-certification and | | |business activities and related information |pre-authorization of treatment or services for the patient before | | |processing associated with billing and collecting |providing them. Conducting patient financial counseling to | | |for goods or services provided to customers.
The |determine the patient’s financial responsibilities for care is | | |revenue cycle at provider organizations should |another revenue cycle activity, as is submitting claims and | | |ensure that patients are properly categorized |following up on them if payment is not received within a certain | | |regarding payment obligation, that correct billing |time period. | |takes place, and that the correct payment is | | | |received, all in a timely fashion. | | |Payer mix |The payer mix consists of revenue generated from |Most health care facilities will accept a variety of health care | | |different payers who cover the costs of health care |payment plans, with Medicare and Medicaid assuming a large portion | | |treatments and services for patients, such as a |of the payer mix.An organization that understands this payer mix | | |managed care or government assisted plan. |can forecast earnings projections based on the revenue generated | | | |from these payers.
|Revenue |Revenues are monies collected or expected to be |Each time a patient pays a medical bill or a copay fee, this | | |collected by a business for providing health care |generates revenue for a health care organization. When a health | | |services to patients. |insurance claim is successfully processed and payment is received | | | |in full, more revenue is generated. |